“We are pleased with the quarter’s results. Patients benefitted from
several significant generic and specialty medicine launches, most
notably our Copaxone® 40mg in the U.S. Our global generics
business delivered increased profitability, and our U.S. generics
revenues were up 17% year-over-year,” stated Erez Vigodman, President
and CEO of Teva.

Mr. Vigodman continued, “We are intensely focused on solidifying the
foundation of Teva, maintaining the Copaxone® franchise,
driving sustainable organic growth, and positioning Teva for long-term
value creation. During 2014, we will deliver significant savings as part
of our cost reduction program, accelerate the transformation of our
operations network, strengthen our global leadership in generics and
continue to increase confidence in Teva.”

Generic Medicine Segment

Generics

Three Months Ended March 31,

Percentage Change

2014

2013

2014 - 2013

U.S.$ in millions / % of Segment Revenues

Revenues

$

2,398

100

%

$

2,328

100

%

3

%

Gross Profit

1,042

43

%

951

41

%

10

%

R&D Expenses

124

5

%

108

5

%

15

%

S&M Expenses

419

17

%

461

20

%

(9

%)

Segment Profitability*

499

21

%

382

16

%

31

%

* Segment profitability consists of gross profit, less S&M and R&D
expenses related to the segment.Segment profitability does
not include G&A expenses, amortization and certain other items.We
recently changed the classification of certain of our products.
The data presented have beenconformed to reflect the revised
classification for all periods.

Generic medicine revenues in the first quarter of 2014 amounted
to $2.4 billion (including API sales of $179 million), an increase of 3%
compared to $2.3 billion in the first quarter of 2013. In local currency
terms, sales increased 4%.

Generic revenues consisted of:

U.S. revenues of $1.0 billion, an increase of 17% compared to the
first quarter of 2013. The increase resulted mainly from the exclusive
launch of capecitabine (Xeloda®), the launch of tolterodine
tartrate (Detrol®) and higher sales of budesonide
inhalation (Pulmicort®) as well as products that were sold
in 2014 and not sold in the first quarter of 2013, the largest of
which were niacin ER (Niaspan®) and tobramycin (Tobi®).
These increases were partially offset by declines in other products
due to loss of exclusivity or additional competition, the most
significant of which were amphetamine salts (Adderall®),
fenofibrate (Tricor®) and clonidine patch (Catapres TTS®).

European revenues of $818 million, a decrease of 4%, or 7% in local
currency terms, compared to the first quarter of 2013. The decrease in
revenues was due to lower sales of API to third parties and of generic
medicine in certain markets, as we pursue our strategy of profitable
and sustainable business in the region, and take a selective approach
to the tender market. Results in central and eastern Europe were
affected by the mild winter season.

ROW revenues of $532 million, a decrease of 9%, but an increase of 1%
in local currency terms, compared to the first quarter of 2013. The
increase in local currency terms was driven by higher sales in Latin
America and Canada, largely offset by a decline in Russia, which was
affected by the mild winter season. Our ROW markets were impacted
significantly by the weakening of various local currencies compared to
the U.S. dollar.

API sales to third parties in the first quarter of 2014 amounted to $179
million, a decrease of 7% in both dollar and local currency terms,
compared to the first quarter of 2013. The decrease resulted from
production issues and management changes in our API organization.

Generic medicine revenues comprised 48% of our total revenues in the
quarter, in line with the first quarter of 2013.

Generic Medicine Gross Profit

Gross profit from our generic medicine segment in the first quarter of
2014 amounted to $1.04 billion, an increase of 10%, compared to $0.95
billion in the first quarter of 2013. Gross profit margin for our
generic medicine segment in the first quarter of 2014 increased to
43.5%, from 40.9% in the first quarter of 2013. The higher gross profit
was mainly a result of higher revenues and the change in the composition
of revenues in the United States and Europe, mainly products launched
during the first quarter of 2014 and in the second half of 2013 in the
United States. These increases were partially offset by lower revenues
from our ROW markets, as well as a decrease in profit from API sales to
third parties.

Generic Medicine Profitability

Profitability of our generic medicine segment amounted to $499 million
in the first quarter of 2014, compared to $382 million in the first
quarter of 2013. Generic medicine profitability as a percentage of
generic medicine revenues was 20.8% in the first quarter of 2014, up
from 16.4% in the first quarter of 2013. The increase was mainly due to
higher revenues, higher gross profit and lower S&M expenses, which were
partially offset by an increase in R&D expenses.

Specialty Medicine Segment

Specialty

Three Months Ended March 31,

Percentage Change

2014

2013

2014 - 2013

U.S.$ in millions / % of Segment Revenues

Revenues

$

2,114

100

%

$

2,052

100

%

3

%

Gross Profit

1,843

87

%

1,786

87

%

3

%

R&D Expenses

227

11

%

201

10

%

13

%

S&M Expenses

499

24

%

453

22

%

10

%

Segment Profitability*

1,117

53

%

1,132

55

%

(1

%)

* Segment profitability consists of gross profit, less S&M and R&D
expenses related to the segment.Segment profitability does
not include G&A expenses, amortization and certain other items.We
recently changed the classification of certain of our products.
The data presented have beenconformed to reflect the revised
classification for all periods.

Specialty medicine revenues in the first quarter of 2014 amounted
to $2.1 billion, an increase of 3% compared to the first quarter of
2013. U.S. specialty medicine revenues amounted to $1.5 billion, an
increase of 3% compared to the first quarter of 2013. European specialty
medicine revenues amounted to $482 million, an increase of 8%, or 4% in
local currency terms, compared to the first quarter of 2013. ROW
specialty medicine revenues amounted to $102 million, a decrease of 18%,
or 8% in local currency terms, compared to the first quarter of 2013.

Specialty medicine revenues comprised 42% of our total revenues in the
quarter, in line with the first quarter of 2013.

The increase in specialty medicine revenues from the first quarter of
2013 was primarily due to higher revenues of CNS and oncology products,
partially offset by lower revenues of other specialty medicines.

The following table presents revenues by therapeutic area and key
products for our specialty medicine segment for the three months ended
March 31, 2014 and 2013:

Three Months Ended

March 31,

PercentageChange

2014

2013

2014 from2013

U.S. $ in millions

CNS

1,413

1,359

4%

Copaxone®

1,070

1,064

1%

Azilect®

114

93

23%

Nuvigil®

101

83

22%

Provigil®

21

24

(13%)

Oncology

262

239

10%

Treanda®

180

171

5%

Respiratory

230

234

(2%)

ProAir®

114

88

30%

Qvar®

71

94

(24%)

Women's Health

124

124

§

Other Specialty

85

96

(11%)

Total Specialty Medicine

2,114

2,052

3%

We recently changed the classification of certain of our products.
The data presented have beenconformed to reflect the revised
classification for all periods.

Global sales of Copaxone®(20 mg/mL and 40
mg/mL), the leading multiple sclerosis therapy in the U.S. and globally,
increased 1% compared to the first quarter of 2013. In the United
States, sales increased 1% to $816 million following a price increase in
January 2014. Sales outside the United States amounted to $254 million,
a decrease of 2% in both U.S. dollar and local currency terms, compared
to the first quarter of 2013. The decrease reflects the timing of
tenders in Russia, which took place in the first quarter of 2013 but not
in the first quarter of 2014, and was partially offset by higher sales
in Europe.

As of April 18, 2014, Copaxone® 40 mg/mL U.S. market share in
terms of total prescriptions was 10.5%. Our U.S. market share for the
two Copaxone® products in terms of total prescriptions was
33.5%, with Copaxone® 40 mg/mL then accounting for 31% of
total Copaxone® prescriptions.

Our global Azilect® revenues amounted to $114 million,
an increase of 23% compared to the first quarter of 2013, while global
in-market revenues increased 20% to $143 million. The increase in sales
reflects both price increases and volume growth in the United States, as
well as volume growth in Europe.

Sales of our oncology products amounted to $262 million in the
first quarter of 2014, compared to $239 million in the first quarter of
2013. The increase resulted primarily from sales of our recently
launched G-CSF products, Lonquex® and Granix®, as
well as higher sales of Treanda®. Sales of Treanda®
amounted to $180 million in the first quarter of 2014, compared to $171
million in the first quarter of 2013.

Sales of our respiratory products amounted to $230 million in the
first quarter of 2014, a decrease of 2% compared to the first quarter of
2013, mainly due to lower sales in Europe and our ROW markets, partially
offset by higher sales in the United States. ProAir®
revenues amounted to $114 million in the first quarter of 2014, an
increase of 30% compared to the first quarter of 2013, mainly due to
volume growth. Qvar® revenues amounted to $71
million in the first quarter of 2014, a decrease of 24% compared to the
first quarter of 2013, due to higher Medicaid sales in the United States
in the current quarter.

Specialty Medicine Gross Profit

Gross profit from our specialty medicine segment amounted to $1.8
billion in the first quarter of 2014, an increase of 3% compared to the
first quarter of 2013.

Gross profit margin for our specialty medicine segment was 87.2% in the
first quarter of 2014, compared to 87.0% in the first quarter of
2013.The higher gross profit was mainly a result of higher sales of
specialty medicines.

Specialty Medicine Profitability

Profitability of our specialty medicine segment amounted to $1.1 billion
in the first quarter of 2014, a decrease of 1% compared to the first
quarter of 2013.

Specialty medicine profitability as a percentage of segment revenues was
52.8% in the first quarter of 2014, down from 55.2% in the first quarter
of 2013. This is a result of higher S&M expenses in anticipation of new
product launches, including Copaxone® 40 mg/mL, and higher
R&D expenses as we expand our specialty and NTE pipelines, partially
offset by higher gross profit.

The following table presents details of our multiple sclerosis franchise
and of our other specialty medicines for the three months ended March
31, 2014 and 2013:

MS

Three Months Ended March 31,

Percentage Change

2014

2013

2014 - 2013

U.S.$ in millions / % of Segment Revenues

Revenues

$

1,070

100%

$

1,064

100%

1%

Gross Profit

961

90%

956

90%

1%

R&D Expenses

22

2%

21

2%

5%

S&M Expenses

163

15%

110

10%

48%

Segment Profitability*

776

73%

825

78%

(6%)

Specialty (excluding MS)

Three Months Ended March 31,

Percentage Change

2014

2013

2014 - 2013

U.S.$ in millions / % of Segment Revenues

Revenues

$

1,044

100%

$

988

100%

6%

Gross Profit

882

84%

830

84%

6%

R&D Expenses

205

20%

180

18%

14%

S&M Expenses

336

32%

343

35%

(2%)

Segment Profitability*

341

33%

307

31%

11%

We recently changed the classification of certain of our products.
The data presented have beenconformed to reflect the revised
classification for all periods.

Other Activities

OTC revenues amounted to $269 million in the first quarter of
2014, a decrease of 12%, or 9% in local currency terms, compared to $306
million in the first quarter of 2013, primarily due to lower sales in
Eastern Europe.

PGT’s in-market sales amounted to $356 million in the first quarter of
2014, a decrease of 13% compared to the first quarter of 2013. This
decline was mainly the result of an exceptionally weak cough and cold
season in Europe and Russia.

Other revenues amounted to $220 million in the first quarter of
2014, mostly from the distribution of third-party products in Israel and
Hungary, compared to $215 million in the first quarter of 2013.

Exchange rate differences between the first quarter of 2014 and
the first quarter of 2013 reduced our revenues by $30 million and our
non-GAAP operating income by $27 million.

Non-GAAP Information: Net non-GAAP charges in the first quarter
of 2014 amounted to $294 million, consisting mainly of amortization of
purchased intangible assets. Accordingly, non-GAAP net income and
non-GAAP EPS for the quarter are adjusted to exclude these and certain
other items, as follows:

Amortization of purchased intangible assets totaling $285 million, of
which $268 million are included in cost of goods sold and the
remaining $17 million in selling and marketing expenses;

Restructuring, impairment and other expenses of $58 million;

Legal settlements of $29 million;

Regulatory actions taken in facilities of $18 million; and

Related tax benefit of $96 million.

Teva believes that excluding such items facilitates investors'
understanding of its business. See the attached tables for a
reconciliation of the U.S. GAAP results to the adjusted non-GAAP figures.

Key Metrics for the First Quarter 2014

GAAP net income and GAAP diluted EPS were $744 million and
$0.87 in the first quarter of 2014, both up 18%, compared to GAAP net
income of $630 million and GAAP diluted EPS of $0.74 in the first
quarter of 2013.

Non-GAAP net income and non-GAAP diluted EPS were $1.04 billion
and $1.22 in the first quarter of 2014, an increase of 8% and 9%,
respectively, compared to $0.96 billion and $1.12 in the first quarter
of 2013.

Quarterly non-GAAP operating income was $1.4 billion in the first
quarter of 2014, up 9% compared to the first quarter of 2013. Quarterly
GAAP operating income was $972 million, an increase of 11%, compared to
$874 million in the first quarter of 2013.

Non-GAAP gross profit margin was 59.7% in the first quarter of
2014, compared to 58.6% in the first quarter of 2013. GAAP gross profit
margin was 53.9% in the quarter, compared to 52.8% in the first quarter
of 2013. The increase in gross profit margin primarily reflects the
higher profitability of our generic medicine segment.

Research & Development (R&D) expenditures in the first
quarter of 2014 amounted to $353 million, or 7.1% of revenues, compared
to $329 million, or 6.7% of revenues in the first quarter of 2013. R&D
expenses related to our generic medicine segment amounted to $124
million in the first quarter of 2014, an increase of 15% compared to
$108 million in the first quarter of 2013, mainly due to higher expenses
associated with the generic medicine segment in the United States. R&D
expenses related to our specialty medicine segment amounted to $227
million in the first quarter of 2014, an increase of 13% compared to
$201 million in the first quarter of 2013, primarily as a result of
increased investment in our NTEs, respiratory and CNS pipelines.

Selling and Marketing (S&M) expenditures (excluding
amortization of purchased intangible assets) amounted to $967 million,
or 19.3% of revenues, in the first quarter of 2014, compared to $985
million, or 20.1% of revenues in the first quarter of 2013. S&M expenses
related to our generic medicine segment amounted to $419 million in the
first quarter of 2014, a decrease of 9% compared to $461 million in the
first quarter of 2013, mainly due to lower expenses in Europe and in
Russia. S&M expenses related to our specialty medicine segment amounted
to $499 million in the first quarter of 2014, an increase of 10%,
compared to $453 million, in the first quarter of 2013. The increase in
specialty S&M expenses was primarily due to expenditures related to our
launches of Copaxone® 40 mg/mL, Lonquex® and Granix®,
as well as preparation for additional product launches planned for the
remainder of 2014.

General and Administrative (G&A) expenditures amounted to
$302 million in the first quarter of 2014, or 6.0% of revenues, compared
with $307 million, or 6.3% of revenues, in the first quarter of 2013.

Non-GAAP financial expenses amounted to $84 million in the first
quarter of 2014, compared to $81 million in the first quarter of 2013.
GAAP financial expenses for the first quarter of 2014 amounted to $81
million, compared to $175 in the first quarter of 2013.

The provision for non-GAAP tax for the first quarter of 2014
amounted to $239 million on pre-tax non-GAAP income of $1.3 billion. The
provision for tax in the first quarter of 2013 was $193 million on
pre-tax income of $1.2 billion. GAAP tax expenses for the first quarter
of 2014 amounted to $143 million. In the first quarter of 2013, tax
expenses amounted to $53 million.

Our quarterly non-GAAP tax rate for the first quarter of 2014 was
18.7%, compared to 16.5% in the first quarter of 2013. Our quarterly
GAAP tax rate for the first quarter of 2014 was 16.0%, compared to 7.6%
in the first quarter of 2013. The increase in our quarterly tax rate
mainly reflects the lapse of our tax exemptions under the previous
Israeli tax incentives regime in 2013 such that our profits in Israel
are now generally subject to tax at 9%.

Cash flow from operations generated during the first quarter of
2014 amounted to $0.9 billion, compared to $1.1 billion in the first
quarter of 2013. The decrease was mainly due to $0.2 billion of payments
made pursuant to legal settlements, including the pantoprazole
settlement. Free cash flow, excluding net capital expenditures and
dividends amounted to $382 million, a decrease of $258 million from the
first quarter of 2013.

Cash and marketable securities at March 31, 2014 amounted to $1.1
billion.

For the first quarter of 2014, the weighted average outstanding
shares for the fully diluted earnings per share calculation was 852
million on both a GAAP and non-GAAP basis. At March 31, 2014, the
outstanding shares for calculating Teva's market capitalization were
approximately 851 million.

Shareholders’ equity was $23.0 billion at March 31, 2014,
compared to $22.6 billion at December 31, 2013. The increase primarily
reflects net income of $0.7 billion and proceeds from employee stock
option exercises of $0.1 billion, partially offset by dividend payments
of $0.3 billion as well as by the negative impact of currency
fluctuations of $0.2 billion.

Dividend

The Board of Directors, at its meeting on April 29, 2014, declared a
cash dividend for the first quarter of 2014 of NIS 1.21 per share
(approximately 34.7 cents according to the rate of exchange on April 29,
2014).

The record date will be May 20, 2014, and the payment date will be June
2, 2014. Tax will be withheld at a rate of 15%.

Conference Call

Teva will host a live webcast and a conference call to discuss its first
quarter 2014 results on Thursday, May 1, 2014, at 8:00 a.m. ET. To
access the live webcast and view the accompanying slide presentation,
visit the Investor Relations section of Teva's website, at http://ir.tevapharm.com,
at least 15 minutes before the presentation is scheduled to begin; click
on the webcast icon to register and download or install any necessary
software. In addition to the webcast can be accessed by dialing in, at
least ten minutes prior to the scheduled call time, to U.S.:
1.877.327.2806; Canada: 1.800.608.0284; International: +44
(0)1452.556664. The conference ID is 34735094#.

Following the conclusion of the call, a replay of the webcast will be
available within 24 hours at the Company's website at www.tevapharm.com.
A replay of the call will also be available until May 15, 2014, at 11:00
a.m. ET, by calling U.S.: 1.866.247.4222; Canada: 1.866.878.9237;
International +44 (0)1452.550000. The Conference ID is 34735094#.

About Teva

Teva Pharmaceutical Industries Ltd. (NYSE: TEVA) is a leading global
pharmaceutical company, committed to increasing access to high-quality
healthcare by developing, producing and marketing affordable generic
drugs as well as innovative and specialty pharmaceuticals and active
pharmaceutical ingredients.

Headquartered in Israel, Teva is the world's leading generic drug maker,
with a global product portfolio of more than 1,000 molecules and a
direct presence in about 60 countries. Teva's Specialty medicine
businesses focus on CNS, respiratory oncology, pain, and women's health
therapeutic areas as well as biologics. Teva currently employs
approximately 45,000 people around the world and reached $20.3 billion
in net revenues in 2013.

This release contains forward-looking statements, which are based on
management’s current beliefs and expectations and involve a number of
known and unknown risks and uncertainties that could cause our future
results, performance or achievements to differ significantly from the
results, performance or achievements expressed or implied by such
forward-looking statements. Important factors that could cause or
contribute to such differences include risks relating to: our ability to
develop and commercialize additional pharmaceutical products;
competition for our innovative products, especially COPAXONE®
(including competition from orally-administered alternatives, as well as
from potential purported generic equivalents); the possibility of
material fines, penalties and other sanctions and other adverse
consequences arising out of our ongoing FCPA investigations and related
matters; our ability to achieve expected results from the research and
development efforts invested in our pipeline of specialty and other
products; our ability to reduce operating expenses to the extent and
during the timeframe intended by our cost reduction program; our ability
to identify and successfully bid for suitable acquisition targets or
licensing opportunities, or to consummate and integrate acquisitions;
the extent to which any manufacturing or quality control problems damage
our reputation for quality production and require costly remediation;
our potential exposure to product liability claims that are not covered
by insurance; increased government scrutiny in both the U.S. and Europe
of our patent settlement agreements; our exposure to currency
fluctuations and restrictions as well as credit risks; the effectiveness
of our patents, confidentiality agreements and other measures to protect
the intellectual property rights of our specialty medicine; the effects
of reforms in healthcare regulation and pharmaceutical pricing,
reimbursement and coverage; governmental investigations into sales and
marketing practices, particularly for our specialty pharmaceutical
products; uncertainties related to our recent management changes; the
effects of increased leverage and our resulting reliance on access to
the capital markets; any failure to recruit or retain key personnel, or
to attract additional executive and managerial talent; adverse effects
of political or economical instability, major hostilities or acts of
terrorism on our significant worldwide operations; interruptions in our
supply chain or problems with internal or third-party information
technology systems that adversely affect our complex manufacturing
processes; significant disruptions of our information technology systems
or breaches of our data security; competition for our generic products,
both from other pharmaceutical companies and as a result of increased
governmental pricing pressures; competition for our specialty
pharmaceutical businesses from companies with greater resources and
capabilities; decreased opportunities to obtain U.S. market exclusivity
for significant new generic products; potential liability in the U.S.,
Europe and other markets for sales of generic products prior to a final
resolution of outstanding patent litigation; any failures to comply with
complex Medicare and Medicaid reporting and payment obligations; the
impact of continuing consolidation of our distributors and customers;
significant impairment charges relating to intangible assets and
goodwill; potentially significant increases in tax liabilities; the
effect on our overall effective tax rate of the termination or
expiration of governmental programs or tax benefits, or of a change in
our business; variations in patent laws that may adversely affect our
ability to manufacture our products in the most efficient manner;
environmental risks; and other factors that are discussed in our Annual
Report on Form 20-F for the year ended December 31, 2013 and in our
other filings with the U.S. Securities and Exchange Commission.
Forward-looking statements speak only as of the date on which they are
made and we assume no obligation to update or revise any forward-looking
statement, whether as a result of new information, future events or
otherwise.

Consolidated Statements of Income

(Unaudited, U.S. dollars in millions, except share and per
share data)

Three months ended

March 31,

2014

2013

Net revenues

5,001

4,901

Cost of sales

2,304

2,311

Gross profit

2,697

2,590

Research and development expenses

353

329

Selling and marketing expenses

984

995

General and administrative expenses

302

307

Legal settlements and loss contingencies

29

27

Impairments, restructuring and others

57

58

Operating income

972

874

Financial expenses – net

81

175

Income before income taxes

891

699

Income taxes

143

53

Share in losses of associated companies – net

8

20

Net income

740

626

Net loss attributable to non-controlling interests

(4

)

(4

)

Net income attributable to Teva

744

630

Earnings per share attributable to Teva:

Basic ($)

0.88

0.74

Diluted ($)

0.87

0.74

Weighted average number of shares (in millions):

Basic

850

855

Diluted

852

856

Non-GAAP net income attributable to Teva:*

1,038

960

Non-GAAP earnings per share attributable to Teva:

Basic ($)

1.22

1.12

Diluted ($)

1.22

1.12

Weighted average number of shares (in millions):

Basic

850

855

Diluted

852

856

* See reconciliation attached.

Condensed Consolidated Balance Sheets

(U.S. dollars in millions)

(Unaudited)

March 31,

December 31,

2014

2013

ASSETS

Current assets:

Cash and cash equivalents

901

1,038

Accounts receivable

5,275

5,338

Inventories

4,976

5,053

Deferred income taxes

1,034

1,084

Other current assets

1,262

1,207

Total current assets

13,448

13,720

Other non-current assets

1,470

1,696

Property, plant and equipment, net

6,665

6,635

Identifiable intangible assets, net

6,330

6,476

Goodwill

18,979

18,981

Total assets

46,892

47,508

LIABILITIES AND EQUITY

Current liabilities:

Short-term debt

1,552

1,804

Sales reserves and allowances

4,839

4,918

Accounts payable and accruals

3,143

3,317

Other current liabilities

1,868

1,926

Total current liabilities

11,402

11,965

Long-term liabilities:

Deferred income taxes

1,256

1,247

Other taxes and long-term liabilities

960

1,273

Senior notes and loans

10,244

10,387

Total long term liabilities

12,460

12,907

Equity:

Teva shareholders’ equity

22,967

22,565

Non-controlling interests

63

71

Total equity

23,030

22,636

Total liabilities and equity

46,892

47,508

Condensed Consolidated Cash Flow

(Unaudited, U.S. Dollars in millions)

Three months ended

March 31,

2014

2013

Operating activities:

Net income

740

626

Net change in operating assets and liabilities

(248

)

60

Items not involving cash flow

406

416

Net cash provided by operating activities

898

1,102

Net cash used in investing activities

(388

)

(266

)

Net cash used in financing activities

(634

)

(2,260

)

Translation adjustment on cash and cash equivalents

(13

)

(61

)

Net change in cash and cash equivalents

(137

)

(1,485

)

Balance of cash and cash equivalents at beginning of period

1,038

2,879

Balance of cash and cash equivalents at end of period

901

1,394

Non GAAP reconciliation items

(Unaudited, U.S. Dollars in millions)

Three months ended

March 31,

2014

2013

Amortization of purchased intangible assets - under cost of
sales

268

269

Restructuring and other expenses

56

43

Expense in connection with legal settlements and reserves

29

27

Costs related to regulatory actions taken in facilities -
under cost of sales

Reconciliation between reported Net Income attributable to
Teva and Earnings per share as reported under US GAAP to Non-GAAP
Net Income attributable to Teva and Earnings per share

Three months ended March 31, 2014

Three months ended March 31, 2013

U.S. dollars and shares in millions (except per share amounts)

GAAP

Non-GAAP Adjustments

Non-GAAP

% of Net Revenues

GAAP

Non-GAAP Adjustments

Non-GAAP

% of Net Revenues

Gross profit (1)

2,697

290

2,987

59.7

%

2,590

281

2,871

58.6

%

Operating income (1)(2)

972

393

1,365

27.3

%

874

376

1,250

25.5

%

Net income attributable to Teva (1)(2)(3)

744

294

1,038

20.8

%

630

330

960

19.6

%

Earnings per share attributable to Teva - Diluted (4)

0.87

0.35

1.22

0.74

0.38

1.12

(1)

Amortization of purchased intangible assets

268

269

Costs related to regulatory actions taken in facilities

18

12

Accelerated depreciation

4

-

Gross profit adjustments

290

281

(2)

Restructuring and other expenses

56

43

Expense in connection with legal settlements and reserves

29

27

Amortization of purchased intangible assets

17

10

Impairment of long-lived assets

1

15

103

95

Operating income adjustments

393

376

(3)

Financial (income) expense

(3

)

94

Tax benefit

(96

)

(140

)

Net income adjustments

294

330

(4)

The weighted average number of shares was 852 million and 856
million for the three months ended March 31, 2014 and 2013,
respectively. Non-GAAP earnings per share can be reconciled with
GAAP earnings per share by dividing each of the amounts included in
footnotes 1-3 above by the applicable weighted average share number.

Segment Information

Generics

Specialty

Three months ended March 31,

Percentage Change

Three months ended March 31,

Percentage Change

2014

2013

2014 - 2013

2014

2013

2014 - 2013

U.S.$ in millions / % of Segment Revenues

U.S.$ in millions / % of Segment Revenues

Revenues

2,398

100

%

2,328

100

%

3

%

2,114

100

%

2,052

100

%

3

%

Gross Profit

1,042

43

%

951

41

%

10

%

1,843

87

%

1,786

87

%

3

%

R&D Expenses

124

5

%

108

5

%

15

%

227

11

%

201

10

%

13

%

S&M Expenses

419

17

%

461

20

%

(9

%)

499

24

%

453

22

%

10

%

Segment Profitability*

499

21

%

382

16

%

31

%

1,117

53

%

1,132

55

%

(1

%)

* Segment profitability is comprised of gross profit for the
segment, S&M and R&D expenses related to the segment. Segment
profitability does not include G&A expenses, amortization and
certain other items.

We recently changed the classification of certain of our products.
The data presented has been conformed to reflect the revised
classification for all periods.

Additional information

Multiple Sclerosis

Three months ended March 31,

Percentage Change

2014

2013

2014 - 2013

U.S.$ in millions / % of MS Revenues

Revenues

1,070

100

%

1,064

100

%

1

%

Gross profit

961

90

%

956

90

%

1

%

R&D expenses

22

2

%

21

2

%

5

%

S&M expenses

165

15

%

110

10

%

50

%

MS profitability

774

72

%

825

78

%

(6

%)

Other Specialty

Three months ended March 31,

Percentage Change

2014

2013

2014 - 2013

U.S.$ in millions / % of Other Specialty Revenues

Revenues

1,044

100

%

988

100

%

6

%

Gross profit

882

84

%

830

84

%

6

%

R&D expenses

205

20

%

180

18

%

14

%

S&M expenses

334

32

%

343

35

%

(3

%)

Other Specialty profitability

343

33

%

307

31

%

12

%

We recently changed the classification of certain of our products.

The data presented has been conformed to reflect the revised
classification for all periods.

Reconciliation of our segment profitability to Teva's
consolidated income before income taxes

Three months ended

March 31,

2014

2013

U.S.$ in millions

Generic medicine profitability

499

382

Specialty medicine profitability

1,117

1,132

Total segment profitability

1,616

1,514

Profitability of other activities

51

43

Total profitability

1,667

1,557

Amounts not allocated to segments:

Amortization

285

279

General and administrative expenses

302

307

Legal settlements and loss contingencies

29

27

Impairments, restructuring and others

57

58

Other unallocated amounts

22

12

0

0

Consolidated operating income

972

874

Financial expenses - net

81

175

Consolidated income before income taxes

891

699

Revenues by Activity and Geographical Area

(Unaudited)

Three Months Ended

March 31,

Percentage Change

Percentage Change

2014

2013

2014 - 2013

2014 - 2013

U.S. $ in millions

in local currencies

Generic Medicine

United States

1,048

893

17

%

17

%

Europe*

818

849

(4

%)

(7

%)

Rest of the World.

532

586

(9

%)

1

%

Total Generic Medicine

2,398

2,328

3

%

4

%

Specialty Medicine

United States

1,530

1,480

3

%

3

%

Europe*

482

448

8

%

4

%

Rest of the World.

102

124

(18

%)

(8

%)

Total Specialty

2,114

2,052

3

%

3

%

Other Revenues

United States

51

68

(25

%)

(25

%)

Europe*

207

197

5

%

3

%

Rest of the World.

231

256

(10

%)

(7

%)

Total Other Revenues

489

521

(6

%)

(6

%)

Total Revenues

5,001

4,901

2

%

3

%

* All members of the European Union, Switzerland, Norway, Albania
and the countries of former Yugoslavia.

We recently changed the classification of certain of our products.

The data presented has been conformed to reflect the revised
classification for all periods.

Revenues by Product line

(Unaudited)

Three Months Ended

March 31,

Percentage Change

2014

2013

2014 - 2013

U.S. $ in millions

Generic Medicine

$

2,398

$

2,328

3

%

API

179

192

(7

%)

Specialty Medicine

2,114

2,052

3

%

CNS

1,413

1,359

4

%

Copaxone®

1,070

1,064

1

%

Azilect®

114

93

23

%

Nuvigil®

101

83

22

%

Oncology

262

239

10

%

Treanda®

180

171

5

%

Respiratory

230

234

(2

%)

ProAir®

114

88

30

%

Qvar®

71

94

(24

%)

Women's Health

124

124

-

Other Specialty

85

96

(11

%)

All Others

489

521

(6

%)

OTC

269

306

(12

%)

Other Revenues

220

215

2

%

Total

$

5,001

$

4,901

2

%

We recently changed the classification of certain of our products.

The data presented has been conformed to reflect the revised
classification for all periods.